Inflation is coming down. Will the markets now go up?Traders, talk about disinflation and a bull market seems contradictory. But is it? I'll explain why disinflationary indicators may mean we see the S&P at previous or even new highs going forward before we recede once again into a true bear market.
Thefed
Breaking UP! Eurodollar Futures.Is the Eurodollar giving us some hints into the mind of JPOW and the fed?
NYT: Fighting the Fed?!New York Times Co
Short Term - We look to Buy at 29.68 (stop at 27.17)
Although the bears are in control, the stalling negative momentum indicates a turnaround is possible. Trend line support is located at 29.60. Support could prove difficult to breakdown. We therefore, prefer to fade into the dip with a tight stop in anticipation of a move back higher. Although the anticipated move higher is corrective, it does offer ample risk/reward today.
Our profit targets will be 35.79 and 39.00
Resistance: 35.90 / 47.50 / 56.00
Support: 29.30 / 22.00 / 16.00
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ALERT - Top and DropTraders,
Is This One Key Indicator Telling Us That it is Time to Buy Again?
For the last few weeks, you’ve heard me sus out my thoughts on the dollar potentially double-topping and then dropping. Heh, top and drop. Should be a song title.
Anywho, a double-top is precisely what the dollar has done thus far. Is this signaling to the markets that it is finally time to buy or will the fed continue to tighten the noose on the markets? I think you all know where my bets lie. And thus, I thought it worthwhile to put out a quick post here regarding the topic.
If you’ve watched any of my videos, you’ve all seen this chart before. The RED highlighted area is, of course, my anticipated price action for the dollar, which is currently a key and leading indicator for the markets along with the VIX (fear index). When the dollar drops (becomes weaker), this weakness is often added to the market growth and appears as strength. Essentially, it is simply the market’s attempt to factor in inflation. Strength in the dollar often negatively impacts the market and denotes deflationary pressures, in this case, coming from the fed.
The VIX has been dropping since mid-June. And now, I expect the dollar may follow suit. If so, we may have a huge buy signal flashing in front of our eyes. Let’s watch this closely and trade accordingly.
Best to you all!
Stew
AUDUSD bout to go down underA couple of key factors here need to come into play, inflation figures need to come back worse than expected in July, followed by the fed becoming more hawkish with their monetary policy. Australia will follow suit and hit that cash rate target of 3-4%. Cost of living isn't taking a reprieve and the mining industry isn't saving the australian economy atm. If we see a reversal of QT from the fed we could see a bounce in risk on markets. But for now the USD looks to reign supreme. Shorting the bear flag to 0.6780 with a breakdown in the support we could see a bearish continuation to 0.6100! Things are getting spicy and you're kidding yourself if you think the markets seen the last of volatility. NFA DYOR
Bitcoin Price Projections Based on Fed Rate IncreasesTraders,
We all know that the USD is still the global reserve currency. And who governs the strength or weakness of the dollar? Yours truly, JPOW and co. Crypto currency prices are absolutely without question tied to the broader markets and the U.S. dollar. Therefore, we MUST consider how our crypto lead dawg will respond to JPOW's rate decision. With that said, here's what I see in the cards for ole' BTC. Let's start with the worst-case scenario:
JPOW rug pulls the market with an enormous 75 pt hike or more - we drop below our strong and very critical 37550 support, somewhere in the purple
JPOW does the expected 50 point hike & either speaks to another 50 pts hike soon or insinuates such action - we remain below our multi-year resistance level and move sideways-ish, somewhere in the red
JPOW does the expected 50 point hike & either speaks to another 25 pt hike soon or insinuates softer action going forward - we either remain red or it is possible we go yellow again
JPOW only bumps it 25! - Rocket fuel! It's moon time again! Green area. 🚀🚀🚀
Watch closely, everything (and I mean EVERYTHING) hinges upon the FED today!
Press release 2:30 EST (I believe).
Best to you all,
-Stewdam.us
Interest rates, Inflation and how to trade it.Hey Traders,
Massive week this week fundamentally for the Forex market. 3 big interest rate decisions being released so I thought there was no better time than now to have a chat about what it is, what it indicates and finally, how traders profit from it. Fed and BOE almost guaranteed to hike rates, RBA is sitting unsure.
Have a watch of the video and I am more than happy to have a discussion in the comment section!
As always, have a fantastic trading week and I wish you all many profits.
Play in consolidation area FX:GBPUSD
The pair's consolidation area is between 130.6 - 131.6
A few days ago, forecast of this pair's movement was sideways tending to be bearish. And that view has not changed, as there has been no significant economic progress between the two pairs.
GBPUSD is likely to move down when the Fed raises interest rates in May.
JPOW, Fed rates, and New Signs of Life in the Crypto Space!The Fed has threatened to raise interest rates two more times this year. But will they? That and news signs of life on the charts. For the first time since November, I am starting to see small indications that the bulls are about to make some moves!
Is Russia Setting Crypto up for Success?In this video:
(0:00-3:00) Recap news: Ukraine, Russia, Coinbase, Crypto Illiquidity
(3:01-4:25) U.S. Dollar Strengthening
(4:26-5:14) VIX up
(5:15-5:44) Indexes Down
(5:45-6:38) Bitcoin Dominance Rising!
(6:39-8:20) Bitcoin Rising but still under significant resistance
(8:21-12:56) Is Russia setting crypto up for success? Could they be planning to subvert the U.S. Dollar?
(12:56-End) Outro
Fed Rate Increase, its relation to BTC price and rounded cyclesHello Traders,
I just wanted to put some visuals together as I am seeing a lot of banks making statements regarding the FED rate increases affecting the price of Bitcoin and other crypto assets negatively. I am not saying that this will not end up being the case but, I wanted to show what happened the last time the FED decided to increase rates compared to what happened with Bitcoin price action.
As you can see around Oct 31st (the first red vertical line) of 2015 the fed stated to gradually and from the chart dramatically increase rates per the FRED chart for FEDFUNDS which shows the Federal Funds Effective Rate* (Blue Line Graph). The price of bitcoin continues to raise just like it has in every other run that has commenced along the way after a halving event which are also depicted on the chart (yellow vertical lines). As you can see where the fed peaked rates and began the downdraw in April of 2019 which lead into the pandemic drop of 2020 the price of Bitcoin was dropping more so due to the typical bear markets that come after a bull run.
Another point I wanted to make is that it seems that every run in the past has ran on a general curve or parabola which it seems as if the price has currently reached that point again in this run as of now.
Is this the bottom? Are we going up from here? Let me know your thoughts in the comments below.
Have a green week,
Savvy
* The federal funds rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. When a depository institution has surplus balances in its reserve account, it lends to other banks in need of larger balances. In simpler terms, a bank with excess cash, which is often referred to as liquidity, will lend to another bank that needs to quickly raise liquidity. (1) The rate that the borrowing institution pays to the lending institution is determined between the two banks; the weighted average rate for all of these types of negotiations is called the effective federal funds rate.(2) The effective federal funds rate is essentially determined by the market but is influenced by the Federal Reserve through open market operations to reach the federal funds rate target.(2)
The Federal Open Market Committee (FOMC) meets eight times a year to determine the federal funds target rate. As previously stated, this rate influences the effective federal funds rate through open market operations or by buying and selling of government bonds (government debt).(2) More specifically, the Federal Reserve decreases liquidity by selling government bonds, thereby raising the federal funds rate because banks have less liquidity to trade with other banks. Similarly, the Federal Reserve can increase liquidity by buying government bonds, decreasing the federal funds rate because banks have excess liquidity for trade. Whether the Federal Reserve wants to buy or sell bonds depends on the state of the economy. If the FOMC believes the economy is growing too fast and inflation pressures are inconsistent with the dual mandate of the Federal Reserve, the Committee may set a higher federal funds rate target to temper economic activity. In the opposing scenario, the FOMC may set a lower federal funds rate target to spur greater economic activity. Therefore, the FOMC must observe the current state of the economy to determine the best course of monetary policy that will maximize economic growth while adhering to the dual mandate set forth by Congress. In making its monetary policy decisions, the FOMC considers a wealth of economic data, such as: trends in prices and wages, employment, consumer spending and income, business investments, and foreign exchange markets.
The federal funds rate is the central interest rate in the U.S. financial market. It influences other interest rates such as the prime rate, which is the rate banks charge their customers with higher credit ratings. Additionally, the federal funds rate indirectly influences longer- term interest rates such as mortgages, loans, and savings, all of which are very important to consumer wealth and confidence.(2)
References
(1) Federal Reserve Bank of New York. "Federal funds." Fedpoints, August 2007.
(2) Board of Governors of the Federal Reserve System. "Monetary Policy".
Suggested Citation:
Board of Governors of the Federal Reserve System (US), Federal Funds Effective Rate , retrieved from FRED, Federal Reserve Bank of St. Louis; fred.stlouisfed.org January 30, 2022.
GBPUSD POTENTIAL BUYAs you know GBP were bullish since a month ago. its because the fundamentally factor. BoE rate high is the key on this situation. meanwhile the fed still not yet take action on the inflation. that makes gbp strong on the fundamental side. as you know that on the last nfp ,the report was so bad. that makes dollar more in suffer these day. investor still waiting for the fed to take action on this inflation situation and covid stuff. on technical analysis, gbp testing the 50 SMA on the daily chart. make possibility to goes up to test the 1.37000 side.